New analysis on the market impact of stablecoins from The Centre of Economics and Business research and BVNK

The first stablecoin was launched in July 2014, 10 years ago. A decade later, it has reached a market cap of $165 billion, with trillions in stablecoin payments settled each year. 

BVNK and The Centre for Economics & Business Research (Cebr) have released a new analysis on the market impact of stablecoins on the 10th anniversary of this digital currency. “The decade of digital dollars” report shows the quantitative link between increasing stablecoin use and economic impact for the first time. 

The report focuses on three key areas: releasing trapped capital, bridging the dollar gap, and mitigating currency volatility. It features commentary from industry leaders Circle, Visa, Chainalysis, and First Digital.

Report insights include:

• There is a high demand for stablecoins in 17 countries, where businesses and consumers are willing to pay an average premium of 4.7% over and above the standard dollar price for access to stablecoins, up to 30% in Argentina. 
• Stablecoins could help mitigate losses from currency volatility in emerging markets, which have, on average, totalled 9.4% of GDP in the countries studied since 1992.
• In 2024, there will be $2.8 trillion in cross-border stablecoin payments. These rapid-settling payments can release business working capital 3-6 days sooner across four major routes studied. At any given moment, $11.6bn of business capital is trapped in traditional B2B payment systems between these routes.

Ben Reynolds, MD of BVNK US, commented: “Businesses are diversifying their supply chains and growing their customer bases globally. For many, it’s hard to get access to strong fiat currencies, and it’s hard to move money quickly across borders. These aren’t just inconveniences, they directly impact capital efficiency and liquidity. Stablecoins bring the utility of the internet to payments, connecting buyers and sellers globally in an instant. For businesses, they offer a powerful alternative to today’s slower cross-border payment systems.”

Nina Skero, chief executive at Cebr, commented: “Businesses and economies lose out when funds are locked up in slow payment systems and can suffer from local currency volatility. Cebr partnered with BVNK to explore how the increasing global adoption of stablecoins alleviates these problems. Among other benefits, stablecoins can streamline the payments process, releasing idle capital for a productive purpose. In selected routes representing approximately 10% of cross-border payments, faster stablecoin transactions will unlock $2.9 billion in increased economic output by 2027.”

Access the report to get all the insights: https://bit.ly/4feF03o